Bankruptcy Plan Confirmed for National Benevolent Association

March 01, 2005

SAN ANTONIO – Haynes and Boone, LLP announced that the Joint Plan of Reorganization for the National Benevolent Association of the Christian Church (Disciples of Christ) and certain of its affiliates (“NBA”) has been confirmed by the Honorable Ronald King of the United States Bankruptcy Court for the Western District of Texas. The Joint Plan was submitted by the NBA and the Creditors Committee.

Under the Joint Plan, unsecured creditors will be paid no less than 102 percent of the amount they were owed when NBA filed its bankruptcy cases.

The Official Committee of Unsecured Creditors was represented at the confirmation hearing by Haynes and Boone, LLP. NBA was represented by Langley & Banack, Inc. and Weil Gotshal & Manges, LLP. The Official Committee of Resident/Creditors was represented by Cox Smith Matthews Incorporated. NBA is one of the largest not-for-profit companies ever to seek bankruptcy relief.

The financial advisors that facilitated the Joint Plan were Houlihan Lokey Howard & Zukin Capital for the Creditors Committee, Huron Consulting Group for NBA and FTI Consulting, Inc. for the Residents Committee.

NBA filed its reorganization cases in San Antonio in February 2004 with debts of over $260 million. Tax-exempt bonds were a substantial portion of NBA’s outstanding debt. St. Louis-based NBA is the social and health services unit of the Christian Church (Disciples of Christ) and operated more than 90 facilities in 20 states with approximately 3,000 employees when it entered the reorganization process.

The Joint Plan provides for NBA’s unsecured creditors to receive payment of their claims from the sale of NBA’s eleven senior living facilities, certain other assets and from part of its other investments. The claims will be paid in full and will also receive post-petition interest as set forth in the Joint Plan.

“The Creditors Committee focused its efforts on finding the best way for NBA to both pay its creditors and continue its long-standing charitable mission of serving seniors, children and the less fortunate,” said Bob Albergotti who led Haynes and Boone’s team. “It was not always easy to get the NBA, creditors, Attorneys General of several states and residents all on the same page, but we were able to find common ground in the Joint Plan and through Houlihan’s excellent work in selling the senior living assets,” Albergotti observed.

According to Matthew R. Niemann, Managing Director Houlihan Lokey Howard & Zukin Capital, "This case presented some novel and interesting challenges given the debtors' not-for-profit status, but fortunately the parties pulled together to unlock $210 million in value from the senior care facilities and not only afford the creditors a par plus accrued recovery, but also provide the residents with a world class owner and new management."

Haynes and Boone, LLP is an international law firm with nine offices throughout Texas, Washington, D.C., Mexico City and New York, providing a full spectrum of legal services to clients around the world. With more than 450 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by National Law Journal. According to Latin Lawyer, Haynes and Boone is “one of the top law firms worldwide practicing in Latin America and one of the most active and fastest-growing business law practices among U.S.-based firms in Mexico.” The firm was recognized in the 2004-2005 edition of Chambers USA: America’s Leading Business Lawyers as being No. 1 in Texas and in the top eight in the United States for Insolvency and Corporate Bankruptcy work. The firm has also been recognized as one of the “20 Best Law Firms to Work For” (Vault.com, 2004), one of the “Best Corporate Law Firms in America” (Corporate Board Member Magazine, 2001-2004) and recipient of the Minority Corporate Counsel Association’s 2002 Thomas L. Sager Award for commitment to diversity.

Houlihan Lokey Howard & Zukin, an international investment bank established in 1970, provides a wide range of services, including mergers and acquisitions, financing, financial opinions and advisory services, and financial restructuring. In 2004, Houlihan Lokey ranked as the No. 1 M&A advisor for transactions under $500 million and the No. 5 advisor for all announced transactions, according to Thomson Financial. The firm has over 600 employees in nine offices in the United States and United Kingdom.

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